Financial problems after PhD?

I know it's an EXTREMELY far way off from where I am now (high school junior), but I still need to be conerned with the future.

If I plan on going to a relatively cheap universty to get a bachelor's in Physics, then go on to get a PhD in some engineering/experimental physics field (say, condensed matter) at a prestigious school like MIT/Caltech, will I be woeful amounts of debt when I graduated from grad school?

Again, I know it's a very long time from now, but it's still important in my decision making. Are Ph. D Engineers usually dead poor after graduating? How bad is it? How long do they usually stay that poor? My family isn't any where near rich so I don't plan on relying on them.

If you finish your undergrad in four years, you may need to take out a loan for them. However, almost any graduate program you go to will not only pay your tuition, but will most likely give you a steipend to live on for being a TA. Not only that, but as long as you remain a full time student, you can defer paying off your student loans with no negative consaquenses.

I managed to finish grad school without any school-related debt. (I bought a new car in my last year of studies). My parents weren't rich by any means.

What you really need at your level is a plan to pay for school.

Here are some thoughts:
(1) In Canada we have registered education saving plans, which allow you to put money in what is to my understanding a tax-free savings account. I hear the government even matches contributions up to a certain level. I don't know if they have anything like this in your area, but it's a good idea to set up a meeting with a financial advisor at your bank (or someone independent) and investigate what savings options are available to you. You still have 2.5 years left to save.

(2) Get a part-time job and summer jobs and make sure that you save a good part of what you earn. There's a lot of frivolous junk out there for kids to blow money on. The economy isn't in the best state right now, and sometimes finding work can be difficult, but every little bit of experience will help you later on - even the real crappy jobs.

(3) Scholarships. Apply for as many as your qualifications allow and keep your marks up so that you'll be competative. Scholarships, in my opinion, snowball. Evidence of previous scholarships make you that much more competative for other scholarships.

(4) Work through undergrad. I don't know how many undergraduate students complain about the cost of tuition and the size of their student loans, but who don't have jobs. There seems to be an idea out there that if you need to take out a student loan, it may as well be a big one. Why not cut down the debt load in the first place?

(5) In grad school you're generally supported, if not by your own scholarship, then by a department teaching or research assistanceship. This isn't a lot of money - usually barely enough for rent and groceries, but enough to survive on.

(6) The world won't come knocking at your door when you finish your PhD. Post-doctoral work doesn't (generally) pay great, so if you do rack up a huge debt-load, don't expect it to be paid off within a year of graduating.

When you eventually do your PhD, you will be paid a stipend either as a research assistant and/or a teaching assistant (the latter requires teaching undergrad classes which is not fun but lots of students do it if their research funding runs out). You can also apply for fellowships.

whether or not that is enough to live on depends on your lifestyle. I rarely went on vacations, shared an apartment with 3 other students, rarely ate out...in short I lived a pretty meager and spartan lifestyle during my phD years because that's what the grad student salary allows. I had friends who lived more lavishly (went skiing every weekend for example) or lived in nicer apartments but they ran up credit card debts that I wouldn't want.

MIT is in boston - high cost of living, i.e. rent is high. Caltech - pasadena, also high cost of living.

However the idea is hopefully that once you are out of school, you can get a job that will pay off your debt.

You can also defer paying off your student loans until you are no longer a student.

As an undergrad, you can apply for scholarships to cover some or even all of your tuition. You can also work part time during the school year and full time during summers. that's what I did anyway. My family didn't pay for any of my education from undergrad thru Phd.

Degrees are expensive, but I don't know that I could find too many reasons for avoiding any kind of education because of expenses.

Student loans pay for themselves.

Physicians rack up huge student loan debt. As far as I know, most people don't consider physicians poor.

The alternative is not going to school, not racking up the debt, and not making much money in a non-skill job. You probably won't enjoy your job, you probably won't have a very high standard of living, but even though you'll be poor and unhappy...you won't have student debt to worry about.

The last thing I'd be worrying about when hoping to get a PhD from MIT or CalTech is your student debt.....

It's terrifically hard to really measure the value of most degrees. Just about nobody actually sits down and finds the net present value of the increase in income a degree gives over no degree, and very often when people try they just plain do it wrong.

Even "professionals" do profoundly stupid things when they study this such as

Not take into account the fact that people who do get degrees would make more money than those who don't, even without the degree

Fail to consider the amount of lost wages while in school

And, most egregiously, they often neglect the time value of money

Break it down honestly and carefully sometime. You'll be surprised what you find.

I'd also like to add that most people are economically and financially stupid; they fail to understand even the basics of personal finance, debt and the time value of money.

So who cares what most people think of how poor physicians are?

My wife is graduating Dental school this spring. I was her patient the other day, getting a cleaning when I overheard a conversation in the chair next to me...

It was a conversation between the Dr and patient that went something like this: "Yeah, I was looking into a school for ...... that was in the Caribbean. It was a great program, but just too expensive. I didn't want to be racking up all that debt just to get a degree...no way."

The dentist said, "It costs $53,000 a year to go here and I have to put all of that on student loans."

The patient said, "Yeah, the school I was looking at was $40,000 a year. I just can't afford to have that kind of debt."

The patient was obviously not a wealthy person...and it was hard for me to bite my tongue and explain how the cost of the school will pay for itself MANY times over compared to the wages she could expect to earn without a degree.

It's terrifically hard to really measure the value of most degrees. Just about nobody actually sits down and finds the net present value of the increase in income a degree gives over no degree, and very often when people try they just plain do it wrong.

Even "professionals" do profoundly stupid things when they study this such as

Not take into account the fact that people who do get degrees would make more money than those who don't, even without the degree

Fail to consider the amount of lost wages while in school

And, most egregiously, they often neglect the time value of money

Break it down honestly and carefully sometime. You'll be surprised what you find.

I don't see where the surprise will be? Will my wife and I feel it was a waste of time for sending her to dental school? Will we come to the conclusion that she should have just taken up a job as a receptionist at a dental office, that we would have been better off than we will with her as a Dentist?

There are too many valuables that come with a college education. I don't know that I could be made to believe otherwise.

Im am going to try to go for a PHD myself. Im a senior in HS. But i wont do it if i know i'll be more 30k in student loan debt. I dont think its worth it if I go so deep in debt that is going to take me a long time to finally pay it all back. A PhD is worth somethign but not that much for me. I'll try to get as much grants and scholarships in undergrad, and if I cant i'll end up going another route. frogger

The patient was obviously not a wealthy person...and it was hard for me to bite my tongue and explain how the cost of the school will pay for itself MANY times over compared to the wages she could expect to earn without a degree.

If I plan on going to a relatively cheap universty to get a bachelor's in Physics, then go on to get a PhD in some engineering/experimental physics field (say, condensed matter) at a prestigious school like MIT/Caltech, will I be woeful amounts of debt when I graduated from grad school?

In physics-related fields no. The school will hire you as a TA/RA, and you won't have any debt from graduate work. Also, many student loans will suspend interest while you are in graduate school, which reduces debt there.

Also even when you can pay them off, you run into the golden handcuffs problem. The nice thing about being a physics Ph.D. is that you can become a beach bum if you want. You graduate, you move to the beach, make some spare money with odd jobs.

With a big name MBA, Law, or Finance degree you are *can't* be a beach bum, because you have to be a lawyer, doctor, whatever to pay off your debt. Which sort of stinks if you find out that you don't like your career and want to make a big change. Also just because you make a lot of money doesn't mean that you are rich. I know lots of people with huge incomes but so much debt, that they are actually poorer than the beach bum.

Even if you can "pay off" the debt, don't forget that you are giving up a lot of freedom.

You could graduate in a recession and find that there are no jobs. That's happening to a *lot* of people that went into law school. You can find that the actual income is a lot less than one expected. That's happening to people with MBA's and culinary school degrees. You could graduate and find that you actually hate the job that you got.

This doesn't happen to everyone, and you can avoid this with research and some careful questions.

His point is simply that you can really do whatever you want. Get your PhD, and if you want to take a job that pays just enough money to survive on then you can afford to do it. You will have freedom, that isn't necessarily the case with other possible paths - as you can see from twofish' other posts.